RESOLUTION OF THE PHILADELPHIA BAR ASSOCIATION IN SUPPORT OF A REDUCTION IN PHILADELPHIA TAXES ON WAGES AND NET PROFITS
WHEREAS, Philadelphia City Council is considering various proposals for reductions in taxes, including in particular the Wage Tax;
WHEREAS, it has been the experience of members of the Philadelphia Bar Association, and especially its tax lawyers, that the level of the Wage Tax is a substantial impediment to businesses locating in, expanding in, or remaining in the City, and that a reduction in the Wage Tax would encourage businesses to locate in, expand or remain in the City;
WHEREAS, due to the application of the Business Privilege Tax and the Net Profits Tax, partners or members of law firms, accounting firms and other types of service firms that conduct business in Philadelphia as partnerships or limited liability companies pay Philadelphia taxes on their net income at rates that substantially exceed the rates of tax imposed under the Wage Tax;
WHEREAS, there is no legitimate policy reason to subject partners and members of law firms and other service firms to disproportionately high rates of tax on their net income;
WHEREAS, the disproportionately high tax rates imposed by the City on law firms and other service firms provide powerful incentives for such firms to relocate outside of the City or expand their suburban offices;
NOW, THEREFORE, BE IT RESOLVED that the Philadelphia Bar Association supports a substantial reduction in the Philadelphia Wage and Net Profits Tax; and
BE IT FURTHER RESOLVED that the Philadelphia Bar Association strongly endorses changes in the Philadelphia Business Privilege Tax and Net Profits Tax that would put personal service firms such as law firms organized as partnerships or limited liability companies on an equal tax footing as businesses organized as corporations.